NEW YORK — Looks like Gap Inc.’s turnaround might have to wait, at least according to one analyst.

Mark Montagna, vice president of specialty retail at C.L. King & Associates, initiated coverage on Gap Inc. with an “underperform” rating and a 12-month target price of $15, and said in his report that “Gap is trying to condition investors to expect a second-half [2006] miss.”

“Our rating is based on seeing an investment in Gap as dead money and our belief that the company is in the midst of a multiyear downhill slide,” Montagna said.

Management has said on previous conference calls that it is repositioning the company and consumers should see merchandising improvements this fall. Shares of Gap closed Tuesday at $18.02, down 0.7 percent.

“We said at the beginning of year that the first half of 2006 would be challenging, and that we expect to make improvements season over season, with the second half of the year showing modest improvements in sales year over year,” a Gap Inc. spokesman said Tuesday. “Gap Inc. and its brands are in the midst of a turnaround.” The spokesman added, “It’s worth noting that the Gap brand has brought in a number of new leaders at senior levels to effect changes.”

The analyst said Gap’s brands are facing “commoditization” in the market, and that its store base has grown just 2 percent since 2001 in comparison to a 40 percent increase in stores at Gap’s closest competitors. Also topping Montagna’s list of negatives plaguing the retailer is “an abundance of management changes” and “increased speculation of [chief executive officer Paul] Pressler’s departure.”

The analyst is projecting fiscal year 2006 and 2007 earnings per share at Gap to be $1.17. But he expects net income to decline “by $20 million to $973 million.”

The analyst added that he believes “any potential turnaround of note will not occur until after [the second half of 2006]. In our opinion, Gap is in a multiyear performance decline as its apparel slides into becoming a commodity.”

Montagna explained in the research report that Pressler and his executive staff “have made a series of pronouncements on the timing of a turnaround in the appeal of Gap merchandise to its customers. Thus far, those pronouncements have not materialized.” He noted that Gap is looking to “gain traction” in the fall. But the improvement, Montagna said, has to be “relative to its competition.”

“As an analogy, General Motors has improved its cars over the years; however, the perceived quality and styling divide versus its competitors has not been reduced,” Montagna said. “We believe Gap is at a similar stage.”

Regarding employee turnover at the Gap division, Montagna said it’s a “net negative” for the short term, “but if integrated properly, it should be a net positive for the longer term.”

“We believe the exiting of longtime senior managers is evidence of a shift from Gap’s traditionally entrepreneurial culture to Paul Pressler’s process-driven culture,” Montagna said. “A cultural tug-of-war is never a positive.”